L&I secretary discusses transition, policies, planned changes

Julia Hearthway is secretary of the Pennsylvania Department of Labor & Industry.

Julia Hearthway prosecutes business and workforce issues the way one might expect her to prosecute a fraud: Peel back the layers to find the skeleton of facts hiding under all the fatty assumptions.

It hasn't been an easy task for the native Texan and daughter of an oil-industry father to transition from an 18-year career as a prosecutor in former Attorney General Tom Corbett's office to Secretary of Labor and Industry under Gov. Corbett.

Hearthway, who's lived most of her adult life in Pennsylvania and today lives in Chester County, spoke to the Business Journal on April 27 about a wide range of topics.

In the first part of this series, she discusses her transition to the department, changing its culture and how the administration plans to streamline the department's mechanisms for connecting companies and workers.

Q: You came from the Attorney General's office to Labor and Industry. These are two very different places, what they do and their functions. What did you bring from there to this job?

A: I didn't recognize it right away. Gov. Corbett I think did when he asked me to be on this job. He said, "Look, I just want someone who gathers the information, gets the correct facts and does what's there." As a prosecutor, that's what you do day in and day out. You gather up the facts. You determine the core facts that everyone can agree on, the disputable facts and those opinions. And then you come up with a solution that's fair. And that's really what I've been doing from day one in Labor and Industry. …

It was funny … very early on in my tenure here, I had a group of Labor and Industry employees who wanted to do what I wanted them to do, what the governor's policy is. They were very eager to help. And there were some good people with some very good intentions here. But I kept asking questions and kept digging to find out what was the core problem with that? What caused that? How do we know that? What are the facts behind that? Do you have any statistics on that? And I could tell they were just befuddled. One person said, "Well, we'll just do whatever you want us to do. Whatever the policy is, we'll implement it." Well, how do we get to the right policy if we don't get down to the facts first? And that was, at least to that particular group, somewhat of a new approach. And an approach that's served very well so far. And was well-received.

Are there particular areas in the department where that's more of an issue? Getting down to those bare-bones facts, sorting through those issues?

No, to be very honest with you. It crosses all areas. It's not just on a case basis. Labor and Industry is truly diverse. We go from inspecting and regulating boilers, all the way up to unemployment compensation issues and workforce investment, and a million things in between. So it's an agency that has a lot of different functions. But at the core of all of them, you want to find out what is at issue here. And every issue has facts attached to them. I don't know that everyone always takes the time to figure out those facts. But we have decisions to be made on various cases, like our labor law compliance. That falls in line more with a sort of legal background, where you have two opposing sides, both presenting their arguments. At the core of those arguments are facts that you need to turn out what really happened. Probably more of what everyone's thinking of is what it looks like to be a prosecutor. But in any other issue, you also have to get down to the facts. We might discuss later the unemployment compensation. We're finding out what really created that system, how that system is truly working. What it means in terms of actual people, actual numbers, actual statistics are important to understanding the problem.

There have been a couple of times where we're talking about an issue and assumptions are just made. Everyone comes with the best intention of solving a problem. But when you assume things and keep assuming them, and they've been assumed for so long that people forget to go back and double check and make sure it's accurate and the facts actually support that assumption. In a way, being someone that did not have a background in this, I needed to go back and understand this. As a prosecutor, you just don't assume things. You don't work on assumptions. And so I would dig, and I had a great team here digging with me. Some of those assumptions just weren't valid, or weren't valid anymore. Or hadn't been updated. And that made a tremendous difference with coming up with actual solutions to problems, seeing the big picture so things worked well.

Was there an assumption that you found out wasn't true that led to a significant policy change?

There's been so many tweaking and changes. With respect to looking for jobs and our workforce investment area, I think there's been a general assumption that businesses aren't hiring — and to some respect that's true. But it's an assumption and a generality that you need to look into further. We started delving into this deeply and started realizing that there are a lot of businesses out there, a lot of Pennsylvania businesses, who are hiring and who need a skilled workforce.

Now, the next assumption that comes along is that we don't have that workforce that's ready to meet those skills. That was part of the answer, but it was only part of the answer. We do have a skilled workforce. There's a mismatch in connecting them. There isn't a good system for an employer, particularly small business individuals, who really don't have the time and the money to do massive recruitment efforts. Especially if the position is not one that you normally would do massive recruitment efforts for. And in searching for individuals, they're available, they're there. There are skill sets of individuals currently looking for jobs that could fill these positions, but we haven't connected the employer with the job seeker.

The assumptions are that there's a mismatch, that we need to do more training, more training, more training. It was also an assumption that just when you train, that's good enough. Well, it's not. That training actually has to lead to a job. It has to be training that's on point with what an employer needs. Now, it's not all wrong. Additional training is good, but it seemed to stop there and the assumption was that we have a skills mismatch, so we need to do a bunch of training and fix that skills mismatch. When you dig a little further, it's more complicated than that. So we're trying to develop systems that really connect that better.

The state's workforce investment boards are applying for a $12 million federal grant for programs that connect training, education and business. Tell me a little more.

Let me talk about the plan first — what we've been calling job-matching on steroids. The way both businesses and individuals connect is pretty archaic. There's a whole group of industries and businesses that post (jobs), and it's want-ads. It may be highly technical in the sense that they're on the Internet now, they're on Craiglist, they're on all kinds of job-matching engines like Monster.com. But when all is said and done, it's still want-ads on the Internet. There's, at best from the statistics I've been told, 60 percent of the jobs out there that are posted. That leaves 40 percent or more of jobs that aren't posted. Quite frankly, the majority of those are filled by word of mouth. That's not a real efficient system. You have to have a pretty broad network to make that a really effective system.

So we started looking at this. And one of the things we wanted to do was capitalize on an opportunity that had been presented to Pennsylvania with Act 6 that was passed last session. Anyone who's unemployed now has to look for work in order to continue to be qualified for unemployment benefits. We were sort of the last state to come on board to do that. An individual that's unemployed must look for work and they must demonstrate that they look for work. Initially, I know that that is looked at as an extra burden. It is not an extra burden; it's an opportunity. So now we have everyone who applies for unemployment also register with us, so we'll now know that unemployed group in a recruiter's point of view. We will know their education. We will know their past job experiences. We will know their training. We could even know their hobbies. In a lot of occupations that's important as an indicator of whether this person will like this job, whether they'll stay with this job or not.

You said sometimes that is looked at as an extra burden.

The criticisms I've heard are, "You think these people aren't looking for jobs? They want to be looking for jobs and now you want them to do extra record-keeping to do that." There used to be a system where employers would verify that the person came in for an interview. That was a burden on businesses. That's not the system we've set up and I think that's where the criticism comes in. It's traumatic to lose your job. And now you're requiring that person who's gone through this trauma, is going through this trauma, to now demonstrate to you that they're looking. They want nothing more than to get a job, but we're not approaching it that way at all. Compliance is important. I don't want to downplay that. We're expecting the vast majority of individuals to comply and comply easily because they do want another job.

But we now have an opportunity because we have a wealth of information on Pennsylvania's businesses to find out who those individuals are, and to go back and get all that information. There are off-the-shelf products that will quickly cull through that information, and not terribly expensive. This does not have to be a massively expensive project. And they will go, "Woo!" This person has a background and skill set. And we have employers looking for individuals looking for that background and skill set. Or we have an employer looking and they're just missing those couple things they need for that job. Well, now we match that person with that employer and add training to it if necessary. But we've done it in a very specific way, a very individualized way, a very concrete way. Instead of the big picture way: oh, we have a group of people without jobs, we have a group of companies with jobs. Let's just pour on a bunch of training to see what happens. Now we want to connect those pieces very well and see where it's missing. Maybe the training is only one certification. Maybe it's on-the-job training that person needs and nothing else. Maybe they're a perfect fit already and we just need to connect them. That's not being done in the current system. Not well, anyway. And we're going to change that. We're going to make this a system in which individuals can truly search for jobs that they're qualified for and can be qualified for. And businesses being able to search for individuals they need, or that they know what they need to do for those individuals to make them a good fit.

So Labor and Industry can use these off-the-shelf programs to better connect people?

Yes, but I want to stress not in the way it's normally been done. There isn't one product out there. We're looking at a whole bunch of things that as a package will really be a robust way for people to connect with jobs. There are programs out there that are like TurboTax. You answer a bunch of questions and — poof! — a beautiful looking résumé pops out. Right now we have a fair amount of time at our Careerlinks going into individual counseling on how to put together a résumé. I'd like to free up the time of the individuals doing that and have them out networking with businesses. What is it you need? What are you going to need in terms of a workforce a year from now? What kind of skills are you looking for? Is this training providing those skills, or when someone graduates from (training) are they only 50 percent ready, or only 30 percent ready, or God forbid, not ready at all? What are the largest non-job-ready aspects you need? So now we take this clerical function in looking for a job and let technology take care of that. And let our individuals who have been spending too much time on that type of work really network with companies.

There have been many programs over the years. Why do we need another program?

It isn't just another program. This is taking the programs we have and making them work together. I'll give you a personal example. When I came on board as Secretary of Labor and Industry, I had a number of positions to fill. I have a pretty wide network of individuals to talk to, discuss who will work in this position, who will work in that position. But it only went so far. I brought on a number of talented people that I think will serve Pennsylvania really well. But then there was another group where I had difficulty filling those positions. And there's no doubt in my mind those individuals existed. And they were having just as difficult a time not knowing that position was here. And here the Secretary of Labor and Industry struggles to connect that. The single business owner that wears a thousand hats a day, that maybe has 60 seconds a day (of spare time) and a staff of two, how are they going to find someone? So we really need to make the system simpler and much better to start connecting that group of unemployed.

When I went around and talked to those who were unemployed, there's a floundering that goes on: "What do I do now? What's my next step? I'm on the Internet every day. I do searches every day. I send out résumé every day. I'm at a brick wall. What do I do?" I think that floundering is at a much larger degree than anyone has ever thought about it as. And I want a system that limits that and lowers that. That focuses all that time and energy on actual jobs that are there. Or a true understanding that "I have a skill set that doesn't have a lot of job openings and probably won't in the next several years. Maybe I need to change that skill set." What is that skill set ideally suited to change to? There are tests that can figure all that out. We don't do enough of that. We don't spend enough time getting into the details. We attack problems in the big sense instead of drilling down to the core problems. Our core problems are lack of information, lack of understanding. And when I say a new program, that's what I mean. We're going to take these existing programs, add to them and we're going to make them work, not just sound like they work.

Reworking Labor & Industry

Next week – Labor & Industry Secretary Julia Hearthway discusses how to pay for new programs in an environment of fiscal constraint, the growing influence of Marcellus Shale on job creation and how to prepare for future economic difficulties and transitions.